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Question
Current Assets ₹ 85,000; Inventory ₹ 22,000; Prepaid Expenses ₹ 3,000; Working Capital ₹ 45,000. Calculate Quick Ratio.
Numerical
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Solution
Quick Assets = Current Assets − Inventory − Prepaid Expenses
= ₹ 85,000 − ₹ 22,000 − ₹ 3,000
= ₹ 60,000
Current Liabilities = Current Assets − Working Capital
= ₹ 85,000 − ₹ 45,000
= ₹ 40,000
Quick Ratio = `"Quick Assets"/"Current Liabilities"`
= `(₹ 60,000)/(₹ 40,000)`
= 1.5 : 1
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